By: @Ophelia Szigeti
At its eleventh hearing of the year on Thursday, May 28, the State Senate Budget Subcommittee No. 4 on State Administration and General Government rejected Item #76, a proposal that would have reduced or waived development related fees for certain state-funded affordable housing developments.
Item 76 was one of more than 150 outstanding budget items considered by the subcommittee as part of its review of Governor Newsom's 2026–27 May Revision budget package. The hearing, which can be viewed here, was brief and concluded with votes on numerous outstanding budget items as vote only items that had been discussed in prior meetings. During the subcommittee hearing, Assemblymembers noted that several information requests made to state agencies remain unanswered.
While the Senate Budget Subcommittee’s rejection of the Governor’s development related fee proposal is an encouraging development, it does not necessarily mean the proposal has been defeated for the year. The proposal must also still be considered by the Assembly's corresponding budget subcommittee and the concept could reappear in future budget negotiations, revised trailer bill language, or other legislative vehicles as discussions continue between the Administration and Legislature in the coming weeks.
The fee waiver proposal originated in the Governor's May Revision and was intended to reduce development costs for certain state-funded housing projects. As originally proposed, concerns were raised regarding the potential consequences for local governments and special districts that rely on development-related fees to fund infrastructure, facilities, and essential public services needed to support new housing and community development.
The proposed budget trailer bill language can be found on the Department of Finance website under RN2614486 v3.
CSDA has been actively engaged on this issue and will continue working with both the Administration and Legislature throughout the budget process. Should the proposal advance in any form, CSDA is seeking amendments to clarify that special district fees are not included among the fees that could be limited, waived, or prohibited. Protecting the ability of special districts to recover the costs of providing critical services and infrastructure remains a priority.
CSDA will continue to monitor developments as budget negotiations progress and will provide updates as additional information becomes available.
Additional information about the proposal and CSDA's advocacy efforts can be viewed here:
UPDATE: CSDA Ups its Advocacy to Protect Special District Impact Fees in State Budget | Advocacy News
Governor's May Revise Could Restrict Infrastructure Funding Needed for Housing
CSDA Advocates to Protect Special District Impact Fees in State Budget
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